U.S. Housing Forecast Fall/Winter 2016
Looking to buy a home in the near future? If you’ve searched the listings lately, you may have noticed a lack of inventory. Demand and home values are on the rise, paired with record-low mortgage rates; this SHOULD be causing inventory to increase, but in fact, economists explain the opposite is happening.
Year over year, the inventory of low and middle-tier homes fell 9.3% on average for the month of May. However, if you’re in the market for top-tier luxury homes, you’re in good shape; the amount of luxury real estate listings fell just 0.5% in the past year.
So what’s the rest of the year going to look like? Here’s our forecast for fall and winter 2016.
Political Factors at Play
World events and politics do play into the markets and it’s important to keep tabs on what’s going on around the world when you’re looking to buy or sell real estate. For example, the recent decision of Britain to withdraw from the European Union has experts predicting the U.S. mortgage rates will drop even lower than their current record-lows.
Another element to consider is the volume of new construction. Right now, new construction remains low across the country. To get supply back in line with demand, economists say the annual groundbreakings should be around 1.5 million, but they are currently standing around 1.1 million. Here again, if you are a luxury buyer, then you have MUCH less to worry about, as the majority of homes that have been built in recent years have been luxury homes.
Inventory and Price
Finally, people simply aren’t moving as often as in past years, which is the most obvious factor when analyzing why we are seeing lower inventory levels of existing homes. For the average homeowner, prices have risen so drastically in some cases that they can’t afford to buy the next slightly bigger or nicer home in their current neighborhoods. So they stay put. Again, if you’re one of the lucky few who can purchase a new home or build one from the ground-up, then this factor does not concern you.
A Special Opportunity for Luxury Buyers
For those luxury home buyers, we wanted to let you know about The Residences at The Ritz-Carlton, Dove Mountain. These luxury single-family custom homes are tucked away into the foothills of The Tortolita Mountains in Marana, Arizona. They offer buyers the luxurious perks of grounds management by The Ritz-Carlton – that means you can enjoy concierge, spa, and many other amenities just like hotel guests. Choose from one of our floorplans or build on one of our estate homesites. Contact us today for more information.